Following the 2016 failed coup attempt, and in the context of increasing mistrust towards the West, Turkey鈥檚 president Erdogan reflected his discontent with the EU and argued that , namely the Shanghai Cooperation Organisation (SCO) led primarily by China and Russia. Soon after, despite being a NATO member, to buy the S-400 air defence missile system. Taken together with Turkey鈥檚 other 鈥榓dventures鈥� in its region, these developments were perceived as manifestations of a changing political economy of Turkey, and were deeply disturbing to Western powers. After all, since the end of the Second World War, Turkey had been a close ally of the US-led Western capitalist bloc, it continued to be one during the Cold War; and had remained very close to US and EU interests following the end of the Cold War in 1991.

For some accounts[i], these developments are related to the changing world order and global power shifts following the 2008 crisis, as the decline of the 鈥榣iberal international order鈥� and the rise of BRICS (Brazil, Russia, India, China and South Africa) marked transformations of the global political economy. Hence, there is a tendency to explain Turkey鈥檚 late political economy in this context. It is argued that, in this 鈥榩ost-liberal international order鈥� where two competing political economies come to the fore, Turkey is moving towards the 鈥楨ast鈥� or 鈥榥on-West鈥� – mainly China and Russia. As such, Turkey鈥檚 engagement with non-Western 鈥榞reat powers鈥� (which are generally characterised by 鈥榓uthoritarian state capitalism鈥� as opposed to the 鈥榥eoliberal political economy鈥�/liberal democracy/鈥檇emocratic capitalism鈥� of the West), shapes Turkey鈥檚 political economy and paves the way for 鈥榓uthoritarianism鈥�, 鈥榠lliberal democracy鈥� and 鈥榮tate capitalism鈥�. Put differently, as the legitimacy crisis of 鈥榃estern neoliberalism鈥� makes it less desirable for countries like Turkey, Turkey is regarded to have deviated from neoliberalism and liberal democracy and moved to state capitalism and authoritarianism.

These accounts seem to provide a coherent picture, and these arguments are backed by various examples demonstrating increased authoritarianism and changes in economic policies. For example the transition to a 鈥楻ussian style presidentialism鈥� (from parliamentary democracy), increased state economic intervention (via the recently created and intensified 鈥榗rony practices鈥�), abandonment of rule-based economic policy and de facto ending of Central Bank independence, as well as 鈥榙e-Europeanisation and de-Westernisation鈥� processes are all argued to be related to this paradigm shift. It is also argued that there are still elements of continuity with the earlier 鈥榥eoliberal鈥� period; but authoritarian state capitalist practices are much more prominent in shaping the character of the late political economy of Turkey under the Justice and Development Party (鈥榯he AKP鈥�) government.

Despite grasping significant aspects of the transformation of the global political economy, these accounts suffer from essential flaws. These include various problematic 鈥榙ualisms鈥� and dichotomies such as national and global, state and market (or state capitalism and liberal democratic capitalism), authoritarianism and democracy, all of which are not understood relationally. First of all, they implicitly or explicitly share the 鈥榞ood AKP goes bad鈥� perspective. As such, the early AKP years in the 2000s are characterised by progressive political economy and Western-backed 鈥榙emocratisation鈥� as well as 鈥榮ocial鈥� and regulatory neoliberalism while the 2010s are characterised by authoritarianism under the influence of non-Western powers. The neoliberal authoritarianism of the earlier periods is dismissed. Second, as , a very clear-cut dichotomy of 鈥榮tate capitalism鈥� and 鈥榥eoliberalism/free-market capitalism鈥� as two radically different political economies is suggested. An idealised image of Western free-market capitalism, where the liberal democratic state does not interfere with the economy (or this intervention is quite limited), is portrayed in contrast to the authoritarian Eastern state capitalism, which is characterised by the state鈥檚 heavy economic intervention, strongman regimes and weak checks and balances. Third, a state-market dichotomy is emphasised in these accounts (i.e. the market was dominant in the 2000s and the state is dominant in the 2010s), hence, the notion of class is absent in these analyses. There is hardly any analysis of labour market restructuring and the continuity thereof. Fourth, it is argued that the recent economic turmoil in Turkey since the summer of 2018 is somewhat resultant of these state capitalist practices, not of neoliberalism per se.

We should take recent developments, changes and ambiguities in Turkey鈥檚 political economy seriously, and attempts to conceptualise and make sense of these developments are useful. However, As Nicos Poulantzas once said, 鈥榗oncepts and notions are never innocent鈥�. I contend that this needs to be done through critical concepts and notions which allow us to see the continuities in state activism that 鈥樷��. Critical political economists tend to conceptualise these developments and make sense of the new forms of neoliberalism under and guises. Furthermore, the recent turmoil in the AKP government鈥檚 economic management and demonstrate the ongoing value of critical concepts such as 鈥樷��.  

In this context, the concept of state capitalism in its current renewed form since the late 2000s is uncritical and ; and in the Turkish context amounts to an exaggeration of practices that reflect contradictory crisis management by the capitalist state. To what extent do continuation of liberal finance and trade regimes (ongoing capital account  openness and EU Customs Union membership; despite occasional 鈥榮oft capital controls鈥� against currency crises and soft protectionism in line with global trends), financialisation, ongoing privatisations, deregulations and flexibilisation of the labour markets mark a real rupture? To what extent do they deserve the term 鈥榮tate capitalism鈥�? Or, as puts it, does the 鈥榮hift of axis鈥� argument stand up to scrutiny if Turkey鈥檚 ongoing political and defence engagements with the West are considered?

Arbitrary periodisations and false dichotomies often lead to misconceptualisations that fail to grasp the complex, contradictory and uneven processes of capitalism, their totality and inner connections. Hence the analytical value of these concepts remains very limited. This is also important for political reasons and has significant political implications. What would be a progressive response to Turkey鈥檚 ongoing crises? President Erdogan鈥檚 recent remarks that Turkey sees its future in Europe would be welcome by commentators who sustain their critique on 鈥榓uthoritarian state capitalism鈥� lines and . A more progressive vision, however, entails a more radical, labour-centred development/strategies that challenges and goes beyond existing conventional paradigms.

Mehmet Erman Erol is a Postdoctoral Researcher at the University of Cambridge. Photo: A view of Levent financial district in Istanbul from the observation deck of Istanbul Sapphire. Source: .

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[i] The works I refer to in this piece in the context of state capitalism in Turkey are produced by prominent political economists Ziya Onis and Mustafa Kutlay. See (2019); (2020); and (2020)

鈥�There are decades where nothing happens; and there are weeks where decades happen鈥�, words famously attributed to Lenin. In the last few weeks the Covid-19 pandemic has led to an extraordinary series of events throughout the world. Our everyday lives, the way our economies are organised, and the ways that we exercise our basic rights and freedoms are being transformed. These changes were unimaginable only a few weeks ago.

A significant aspect of these 鈥榚xtraordinary times鈥� is governments鈥� extraordinary responses to the economic meltdown triggered by the coronavirus crisis. Within the space of just a few weeks, one taboo after another in Western capitalism has been broken, . As monetary policy measures (i.e. unlimited QE, record low interest rates) , unprecedented fiscal stimulus packages including wage and income guarantees came to the fore. In the EU, the so-called ordoliberal principles of competition, free market and a commitment to a balanced budget (that were harshly imposed upon Greek and other peripheral European economies during the Eurozone crisis) appear to have been all but forgotten by the core capitalist countries. 鈥榃e will protect our strategic companies from foreign takeovers鈥� . The infamous 鈥�schwarze Null鈥� budget policy of Germany, for example, was abandoned as the . In the UK, the traditionally austerity-loving Conservative 笔补谤迟测鈥檚 Chancellor of the Exchequer announced an . The Trump administration , amounting to $2 trillion, which includes 鈥榟elicopter money鈥� for the citizens. 鈥�鈥� became the motto of G20 leaders and finance ministers. All of a sudden, austerity ended as the reproduction of the capitalist system became impossible without the protective measures that were introduced. This reflects the fact that austerity was a political choice all along; despite being framed as 鈥�TINA鈥� for years.

Against the backdrop of these developments, the idea of 鈥�鈥� or the 鈥�鈥� came to the fore once again. It is argued that 鈥�鈥�. This reading reflects a dichotomous understanding of the state and market as two opposed forms of social organisation; and it is a recurrent theme in economic journalism and conventional academic analysis on (global) political economy. It is striking that we saw very similar analyses . However, the years following the brief 鈥榠苍迟别谤惫别苍迟颈辞苍颈蝉迟鈥� moment after the 2008 crisis proved that states and markets are forms of the same antagonistic social relations between capital and labour. Indeed, the response was further , against the background of social discontent.

This extraordinary state activism, deficit financing, big government and abandonment of rule-based economic management is argued to . This reflects an understanding of (neo)liberalism as being to do with 鈥榣aissez-faire鈥� and a 鈥榳eak鈥� state; and when the state intervenes it is against these principles. However, as , 鈥榥obody in the tradition of liberal political economy seriously suggested that capitalism could do without a strong and active state鈥�. This is even more forcefully , arguing that the 鈥榚conomic system requires a market police with strong state authority for its protection and maintenanceance鈥�. Furthermore, in a time of need, like the one we are experiencing, that state does not hesitate to become a 鈥榮tate of emergency鈥�.

I do not argue that the crisis triggered by the Covid-19 pandemic would not lead to any change in state-market and/or state-society relations. It is still early days. The reasons behind the crisis, and the unfolding of it, are different from those of the global financial crisis of 2008. Unlike the 2008 crisis, this crisis hit at a time when neoliberalism was already unravelling; and the debt-ridden global capitalism was fragile as it still had not fully recovered from 2008. Furthermore, there has been a backlash against 鈥榞lobalisation鈥� which has been exploited by nationalist-populist leaders. However, this new nationalist turn mainly represented a 鈥榥ational liberalism鈥� as it is . Similarly, we might see more permanent state economic activism as well; as it has already been evident in recent years not only in emerging capitalisms or rising powers but also in the West, as demonstrated by the . This would not be a welcome shift, however. This new state activism prioritises profitability, capitalist accumulation and expansion, and commodification by 鈥榥ational capital鈥�; and does not necessarily reflect a progressive shift from the earlier so-called 鈥榤arket-led鈥� political economy. It is also complemented with a highly authoritarian management of labour power, economy and the wider society, with a stricter imposition of border controls. It also implements new methods of .

This should not lead us to defeatism, however. Politicisation of the crisis is important; demanding more of what is ours is important. Radical demands and interventions are necessary if we are to avoid the same austerity cycle that followed the bail-outs of post-2008. The state, after all, is also an arena of class struggle. But as long as it remains a 鈥榗apitalist state鈥�, its purpose is 鈥�鈥�. Paraphrasing , a socialist response to the crisis triggered by Covid-19 could not be reduced to a defence of statism and welfarism; however 鈥榩rogressive鈥� that might be. As Clarke further argues: 鈥�It is about making qualitative changes, about transforming social relations, about replacing the alienated forms of capitalist political and economic regulation by new forms of collective self-organisation and democratic control; and it is only on the latter basis that the state, and the power of capital, can be effectively confronted.鈥�

Mehmet Erman Erol is a Postdoctoral Researcher at the University of Cambridge. Photo by .